Station numbers in the US

[broadcastguy]

Being a foreign I'm not familiar with what the numbers are to run a station in the US, for example a medium station, not in a crazy top 20 market but not in the middle of nowhere either. Let's say in a ranked market like Salisbury/ Ocean City. What is considered a good sales number and what is the actual cost of running the station (or a cluster of 2 or maybe 3 stations)?

Thanks in advance for your answers!

 

[davideduardo]

Being a foreign I'm not familiar with what the numbers are to run a station in the US, for example a medium station, not in a crazy top 20 market but not in the middle of nowhere either. Let's say in a ranked market like Salisbury/ Ocean City. What is considered a good sales number and what is the actual cost of running the station (or a cluster of 2 or maybe 3 stations)?

Thanks in advance for your answers!

Taking your example of Salisbury, it is a $13 million total revenue market. The #5 station bills about $1 million, and that is a good example. $85 thousand a month, give or take.

Sales expense will generally take the first 18% to 22% of revenue since most business is local direct and not the more costly agency business. That percent includes the sales manager, selling costs, bad debt and sales commissions.

You probably have at least two like dayparts, and voicetrack the rest. Perhaps a syndicated morning show. I'd guess somewhere around 20% for programming and production.

Traffic, accounting, manager, engineer. Maybe $12 to $15 k a month.

The rest is insurance (fire, liability, health, etc), music licensing, office rent or property tax, FICA, business licenses, tower rent or property tax and maintenance, legal, professional services, utilities, etc.

Well run, such a station might have a gross margin of about 25% to even 30%

These are wild guesses, but just to give you a starting point.

 

[broadcastguy]

Awesome input DavidEduardo! Thank you so much!

So let's say your monthly sales are $85.000 (I Guess this is a quite easy goal to achieve with a strong sales and promotion team, a good programming and a decent signal?)

Sales: $17.000
Programming/ production: $17000
Traffic/ accounting/ Engineer: $17000
Insurance/ music licensing, office/twr rent, etc $15000

Total at the end of the month: $19000

Is that correct? We are talking about only one station right? Not the cluster of 2 or 3 stations which in that case I guess traffic, accounting, engineer, rent, etc are almost covered in the first station's expenses.

 

[umfan]

There would more than likely be some incremental cost for those areas with additional stations, but the expense per station would be less than $17k in such an instance.

When you say 'an easy goal to achieve', I would say it's anything but. If a station with an established and reasonably happy advertiser base were acquired, the hard work of establishing this would not have to take place, but keeping them sold on the benefits of continuing to advertise takes a good deal of effort. Finding the right salespeople, retaining them, all the while balancing ratings with ever changing tastes is a challenge. Listeners in medium markets tend to be less fickle than those in large markets, but it takes work.

 

[Groove1670]

....and then there is small market. If you can successfully operate and sell in a small market, I consider you a pro.

I recently spoke to a GSM from a large market who said for starters, he needed a car, clothing budget, and $125K salary. I said.... I would like that too.

He was puzzled... What do you mean?

I said, this is small market radio.

GSM: How much agency business

Me: Not Much

GSM: NTR revenue? How much does the promotions dept. produce?

Me: None, you will need to create your own events like I do.

GSM: How much unsolicited business does the the station receive?

Me: Not much.

GSM: So how do you generate revenue.

Me: Knocking on doors, meeting people, promoting our station and product.

GSM: Okay... let me think about it, and I'll get back to you (crickets).

 

[broadcastguy]

....and then there is small market. If you can successfully operate and sell in a small market, I consider you a pro.

I recently spoke to a GSM from a large market who said for starters, he needed a car, clothing budget, and $125K salary. I said.... I would like that too.

He was puzzled... What do you mean?

I said, this is small market radio.

GSM: How much agency business

Me: Not Much

GSM: NTR revenue? How much does the promotions dept. produce?

Me: None, you will need to create your own events like I do.

GSM: How much unsolicited business does the the station receive?

Me: Not much.

GSM: So how do you generate revenue.

Me: Knocking on doors, meeting people, promoting our station and product.

GSM: Okay... let me think about it, and I'll get back to you (crickets).

By your username I can guess you are talking about an AM? Possibly a daytimer? Guess selling a daytimer AM is hard in every place... Do you have a chance of getting a translator? Where I live some AM's got translators and they are doing just fine, at least they are still on air with commercial programming and ads.

 

[davideduardo]

By your username I can guess you are talking about an AM? Possibly a daytimer? Guess selling a daytimer AM is hard in every place... Do you have a chance of getting a translator? Where I live some AM's got translators and they are doing just fine, at least they are still on air with commercial programming and ads.

The same observations are true for an AM or a Class A FM in a small market.

Those markets don't do much or any transactional (agency) business, and they don't have a promotions "department" or a web content department.

And unsolicited business, even with larger stations, is very rare. In the decades I spent much or all my time in sales, I can name from memory every one of the walk-in or call-in buys I landed.

 

[Poledo]

By your username I can guess you are talking about an AM? Possibly a daytimer? Guess selling a daytimer AM is hard in every place... Do you have a chance of getting a translator? Where I live some AM's got translators and they are doing just fine, at least they are still on air with commercial programming and ads.

Groovy's station is WLYB 96.3 Livingston, AL-Meridian, MS. Very poor economy in that area.
1670 is just his part 15 hobby.

 

[PTBoardOp94]

So let's say your monthly sales are $85.000 (I Guess this is a quite easy goal to achieve with a strong sales and promotion team, a good programming and a decent signal?)

Let's suppose that you make your money exclusively from 5a to 8p, and run 10 minutes of spots per hour. 140 spots per day, 4200 per month. That's $20 a spot.

Now you just have to convince a bunch of people that spending $100 to $200 a day on your station is worthwhile, and more worthwhile than spending it on your competing radio station, or on TV, or on Spotify. This is definitely not easy, and many sales people come in the door, last a year or less, and then quit.

 

[broadcastguy]

Let's suppose that you make your money exclusively from 5a to 8p, and run 10 minutes of spots per hour. 140 spots per day, 4200 per month. That's $20 a spot.

Now you just have to convince a bunch of people that spending $100 to $200 a day on your station is worthwhile, and more worthwhile than spending it on your competing radio station, or on TV, or on Spotify. This is definitely not easy, and many sales people come in the door, last a year or less, and then quit.

I guess small and mid-small market shops usually don't have a promotions team so there's where your sales guy chimes in. The competing radio station is not an issue as long as you have good ratings and can accommodate to what your client wants and needs. I know selling radio is hard, been there, done that and used to get frustrated big time but somehow in the end it always worked and could make some bucks for me and the station.

Once I was trying to make a sell to a tough client and the guy told me "why should I buy from you instead of the other station?", my answer was, "well, I could buy Dasani water every month buy I chose to buy from you because you're local, I know your commitment and I know that if I have a problem or concern with your product I can come and talk directly to you instead of deal by mail with a careless representative miles away" I still have the guy on Facebook and talk once in a while.

 

[Groove1670]

I guess small and mid-small market shops usually don't have a promotions team so there's where your sales guy chimes in. The competing radio station is not an issue as long as you have good ratings and can accommodate to what your client wants and needs. I know selling radio is hard, been there, done that and used to get frustrated big time but somehow in the end it always worked and could make some bucks for me and the station.

We have an FM. We produce a top quality product. We have a local focus. The majority of the day is spent on sales, marketing and promotion. That is the key to small market survival.